Innovation in the Car Industry: AI, Autonomous and Electric Cars

This article explores the latest innovations in the car industry, including AI, autonomous and electric cars. It discusses the reasons why these innovations were introduced and the impact of financialization and mechanization on the industry. The article also covers the benefits and disadvantages of innovation in the industry.

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Innovation in the car industry
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Innovation, enterprise and society: car industry
The car industry has been affected by technological changes both in the production and
geographical distribution of cars across the globe. The major driving force of these technological
changes include the increasing technological complexity of the automotive products that has
resulted in outsourcing manufacturing and service activities from car makers and suppliers. With
this, car makers have been focusing on the value of the final products that are being released into
the market. With an increase in innovation, car industries are upgrading the future of automobiles
across the globe. Empirical evidence shows that shared mobility, connectivity services and
upgrades will be increasing the automotive revenue opportunities at a 30% or close to $6.5
trillion by 2030 (Forbes Technology Council, 2018).
The future technologies in the car industry include: autonomous cars, electric cars and
artificial intelligent cars. These ground-breaking technologies will have a massive change in the
car industry. As an illustration, these cars will be more fuel efficient because of the electric and
hybrid vehicle technology being used. In 2016, there were approximately 2 million electric cars
which were introduced into the global markets for consumers. Additionally, it is expected for the
figure to increase in future since different car industries are producing more electric cars. With
artificial intelligence and machine learning technology, cars will be having a predictive
technology with a personalized driving experience.
Car industries are applying algorithms that will be using an automatic process. In this
scenario, vehicles will be becoming IoT device with the capabilities of connecting to
smartphones and receiving voice commands and cautiously changing the user interface (Ismail,
2017). The predictive technologies will be used as sensors to inform the car owner whether the
vehicle needs a mechanical service. This will depend on the present condition of the car and the

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technology that will be used to assess its performances. These technologies have had a
significant impact in the car industry (Hovorun et al., 2017). The purpose of this essay is to
discuss the organizational/product innovation that has been introduced in the car industry, assess
the reasons why they have been introduced and the impact of financialization.
Organizational/product innovation in the car industry
Artificial Intelligence commonly abbreviated as AI is increasingly transforming the car
industry. This is because, this new technology aims to unveil new efficiencies and capabilities
towards revolutionizing the car industry and the type of products being released into the market.
Empirical evidence shows that, in 2015, the rate at which AI technologies was being installed in
cars was valued at 8%. The percentage is expected to increase to 109% by 2025.There are
different ways in which artificial intelligence will be transforming the automobile industry. First,
artificial intelligence will lead to machine learning capabilities. This means that, AI has been
developed due to numerous scientific experiments in which when applied to machines, it will
think and act like human beings.
However, there is being difference between AI and machine learning. Take for instance,
in the case of Artificial Intelligence, devices will be carrying out tasks like human beings
whereas in Machine learning there will be an application of AI where devices will be given a set
of data to learn for themselves (Kale, 2017, pg.122). An example can be given by Toyota being
that they have gone a step higher towards adoption of machine learning and AI with an objective
of creating a highly responsive autonomous system. Secondly, there is the transformation of
cognitive abilities where self-driving cars will be able to cruise along the roads carrying
assortment of different goods due to be delivered in a designated location. This is a technological
transformation in the cognitive abilities in the AI technologies. This is achieved through

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continuous assessment of the data behavioral patterns and mining capabilities (Burgin,
mKlambach and Gnamm, 2018). The cognitive systems will be working like humans and how
they normally interpret data and information. These cognitive capabilities will be able to deal
with dynamic operating circumstances. Most car companies have started incorporating this type
of technologies into the products. Thirdly, AI will change the infotainment systems of vehicles in
which car companies will be in need of quality hardware and software that will be compatible
with the AI. With infotainment, cars will be able to recognize speech, eye tracking, monitoring
driving, recognizing gestures, storing the available natural languages.
With the AI technologies in the car industry, there will be a new experience of car driving
across the globe where consumers will be satisfied and able to communicate with their cars. The
innovation that has been introduced into the car industry has had enormous impact since the level
of excellence has been taken to the next level. The major examples of AI technologies being
used in the car industry include: Autonomous vehicle having unique driving features, and
DataRPM which is being used to predict machine failure during machine learning and use of
driver assist. Some of the AI trends which have been observed in the automobile industry
include: self-driving cars, cloud computing, IoT, machine learning, deep learning and cognitive
capabilities (Candelo, Matricano and Sorrentino, 2018, P.6).
Reasons why AI was introduced in the car industry.
AI was released into the car industry because car companies wanted to make it possible
for people to interact with machines. This is an experience that is becoming easy with time
because of the advancement in Natural Language Understanding. Additionally, the car industry
wanted to introduce a new driving experience for their customers due to the increase in
technological advancement and trends that have been taking place. Take for instance, when

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consumers are driving and having the right information at the right time is significant when
driving. When it comes to a personalized experience, drivers will be able to seek for
recommendation from their cars due to the type of technology that has been installed into their
system. Additionally, AI was introduced to reduce fatalities such as accidents due to human
errors on the road. AI was also introduced to increase safety protocols such as deploying airbags
and monitoring objects in front of a car (Philip, 2017). Furthermore, AI was aimed to increase
personalized experience for consumers in that, with AI older people could be helped and run a
system diagnostic in case of any malfunctions in the car. This is an approach that will help in the
reduction of accidents on the roads.
Mechanization
AI and automation have transformed the car industry and its surrounding. According to
the study conducted by McKinsey Global Institute, by 2030, the use of AI will have reduced the
human labor by 30% across the globe (Kaisser, 2018). According to the institute, close to 800
million jobs will be lost by the ends of 2030. With AI there will be the introduction of many
robotics in the car manufacturing industries. With the increased pressure from the manufacturing
sector in the automobile industry, technology has doubled the capabilities of human labor. The
new application of AI and robotics is benefiting the manufacturing process. Statistically, 38% of
robotics have been introduced into the car manufacturing industry (Jain, 2018). According to the
International Federation of Robots, they have predicted that automotive manufactures will be
increasing their robotic workforce by approximately by 30% in the next three years. The robotics
will be capturing the imagination and the technology that will be able to create a massive
industrial revolution in the car industry.

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When it comes to employment, there will be a reduction in the cost of labor and other
overhead costs. In a recent article released by Forbes, car manufactures are introducing robotics
that will be able to be compatible with the AI technologies (Lahy et al., 2018, pg. 2240).
Additionally, it was discovered that robots are more efficient and increase productivity as
compared to humans. In the employment sector, there will be increased rates of unemployment
across the globe. There is a theory known as rise of the robots, which is a description of the
negative impacts of robots in regards to the workforce. According to this theory, robotics and AI
will reduce the number of the workforce across the globe. Experts predict that automation of car
manufacturing industries will reduce the number of jobs by 70%. This means that, they will
either get marginalized or completely eliminated.
Financialization.
Innovation can be considered as contemporary concept that incorporates different
discourse. In this case, financialization is the spread of finance with an objective of increasing
social life and increase generation of ideas. When it comes to the car industry, financialization
will help in the generation of ideas and provision of resources that will help in developing better
version of AI technologies that can be used in the car industries. Financialization has led to the
search of talented employees who will be able to develop ideas through application of computer
technologies (Klumpp, 2018, P.5). With this, different car industries will be able to compete
favorably. This is because, with skilled employees in regards to development of AI technologies,
it will be easier to fulfill the demands of consumers on a global scale. Most importantly,
financialization has led to different mergers in the car industries with an objective of coming up
with more ideas to help transform the AI technologies and its application in the automobile
industry.

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In conclusion, innovation has its benefits and disadvantages. However, the benefits of
innovation outweigh the disadvantages. Therefore, the technological transformation should be
embraced. As an illustration with the increased technological advancement, AI has become
significant in today’s business. With AI, there will be a massive transformation in the car
industry that will be helpful to people on a global scale. Other benefits will include; efficiency,
strengthening the performance of the economy, and enhancing the lifestyles of humans.

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References
Burgin M., mKlambach R and Gnamm j. (2018). Innovation in the automotive Industry: No
more Experiments. Accessed date 18/10/2018.Retrieved from:
https://www.bain.com/insights/innovation-in-the-automotive-industry/
Candelo, E., Matricano, D. and Sorrentino, M., 2018. HOW DO MILLENNIALS FORESEE
THE CAR OF THE FUTURE AND THE FUTURE OF THE CAR? EMPIRICAL EVIDENCE
FROM AN OPEN INNOVATION PROCESS PROMOTED BY A MULTINATIONAL
COMPANY. In EURAM-Research in Action–Accelerating knowledge creation in management
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Forbes Technology Council (2018).14 ways AI Will Benefit or harm society. Accessed date
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Hovorun, T.P., Berladir, K.V., Pererva, V.I., Rudenko, S.G. and Martynov, A.I., 2017. Modern
materials for automotive industry.
Ismail N. (2017).AI: the new driving force in the automobile industry. Accessed data
18/10/2018.Retrieved from: https://www.information-age.com/ai-the-new-driving-force--
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Jain A. (2018). A VC Perspective-How valid is the threat of Artificial Intelligence on the Job
Market. Accessed date 18/10/2018.Retrieved from: https://www.entrereneur.com/article/306811
Kaisser M. (2018).4 pillars of Artificial Intelligence that are building the car of the future.
Accessed date 18/10/2018.Retrieved from:
https://whatsnext.nuance.com/connected-living/artificial-intelligence-in-car/

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Kale, D., 2017. Sources of innovation and technology capability development in the Indian
automobile industry. Institutions and Economies, pp.121-150.
Klumpp, M., 2018. Innovation Potentials and Pathways Merging AI, CPS, and IoT. Applied
System Innovation, 1(1), p.5.
Lahy, A., Li, A.Q., Found, P., Syntetos, A., Wilson, M. and Ayiomamitou, N., 2018. Developing
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Philip S. (2017).5 ways artificial intelligence is driving the automobile industry. Accessed data
18/10/2018.Retrieved from: https://bigdata-madesimple.com/5-ways-artificial-inelligence-is-
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